December 2011

Dashboard
The Monthly Auto Update

Data Track: November 2011 volume update of auto majors

Speedometer
November 2011 relative performance

Sector overview and outlook ......................................................... 2 Hero Honda ................................................................................. 3 Bajaj Auto ................................................................................... 4 Maruti Suzuki .............................................................................. 6 Mahindra & Mahindra ................................................................... 8 Tata Motors ................................................................................ 10 TVS Motor ................................................................................. 12 Model wise volumes .................................................................... 13

MOSL Auto Index 110 100 90 80 1-Nov

Sensex

Special Report

8-Nov

15-Nov

22-Nov

29-Nov

Tata Motors (JLR)........................................................................ 14

12-month relative performance

Sector Gauge: October update

Two-wheelers ............................................................................ 16 Three-wheelers .......................................................................... 18 Cars and UVs ............................................................................. 20 Commercial vehicles.................................................................... 22

MOSL Auto Index 115 100 85 70 Nov-10

Sensex

News and Events .................................................................... 25

Tata Motors launched an all new Nano with improved mileage and power Honda Motorcycles launched a new variant of Unicorn Dazzler at INR66,198 Skoda launches the Yeti 4x2 at INR13.2 Lakhs

Feb-11

May-11

Aug-11

Nov-11

Aggregate Volumes For November 2011*

Segment Nov-11 Nov-10 YoY (%) Oct-11 MoM (%) 2-Wheelers 1,041,568 840,284 24.0 1,043,327 -0.2 Motorcycle 931,347 749,397 24.3 938,973 -0.8 3-Wheelers 48,399 38,663 25.2 50,523 -4.2 Cars 116,419 125,789 -7.4 78,757 47.8 UVs 37,013 24,020 54.1 36,671 0.9 Commercial Vehicles 49,834 39,565 26.0 43,347 15.0 LCV 32,835 23,692 38.6 25,457 29.0 M&HCV 16,999 15,873 7.1 17,890 -5.0 Tractors 17,527 17,993 -2.6 31,838 -44.9 Total Volumes 1,310,760 1,086,314 20.7 1,284,463 2.0 * Aggregate of Bajaj Auto, Hero MotoCorp, TVS Motors, Maruti, M&M, and Tata Motors YTDFY12 8,270,009 7,388,415 398,615 840,099 275,556 369,822 231,484 138,338 166,911 10,321,012 YTDFY11 Chg (%) 7,070,517 17.0 6,309,341 17.1 330,772 20.5 999,388 -15.9 212,753 29.5 311,880 18.6 183,779 26.0 128,101 8.0 137,930 21.0 9,063,240 13.9 Source: Company/MOSL

Comparative Valuation
CMP * (INR) Bajaj Auto 1,703 Hero MotoCorp 2,090 Mahindra & Mahindra 730 Maruti Suzuki 962 Tata Motors 183 * Price as on 1st December 2011 Rating Buy Buy Buy Buy Buy P/E (x) FY11 FY12E FY13E 18.8 15.7 13.7 20.8 17.3 13.9 15.0 15.8 11.9 11.8 16.8 11.6 6.8 6.7 5.9 EV/EBITDA (x) FY11 13.1 15.5 14.2 5.8 1.7 FY12E FY13E 10.7 8.6 10.7 8.1 13.2 11.5 8.3 5.7 1.5 1.1 RoE (%) FY11 FY12E FY13E 66.7 54.9 48.0 62.5 60.9 55.1 25.0 22.2 21.3 16.5 10.4 13.3 47.3 34.5 29.8 RoCE (%) FY11 FY12E FY13E 76.1 70.6 65.4 59.2 58.4 63.3 25.6 23.4 23.6 22.1 13.7 17.4 24.6 24.1 24.2 Source: Company/MOSL

Jinesh Gandhi (Jinesh@MotilalOswal.com); Tel: +91 22 3982 5416 Mansi Varma (Mansi.Varma@MotilalOswal.com) + 91 22 3982 5418

Dashboard

Data Track

Sector overview and outlook

Receding headwinds improve outlook

Slowdown in Passenger cars while 2Ws continue to record robust growth: Impacted by macro-headwinds, passenger car segment is showing clear signs of slowdown. However, 2Ws, LCVs and UVs continue to record strong volume growth. Although volume outlook in the short term is impacted by macro headwinds, we believe long term volume outlook remains positive driven by strong economic growth, improved availability of finance, new product launches and exports potential. Softening in commodity cost to support margins in 2HFY12: EBITDA margins are estimated to improve in 2HFY12 as compared to 1HFY12, benefitting from easing commodity costs. However, increasing competitive intensity in some segments would restrict pricing power. We anticipate cost reduction measures, productivity improvement programs and high operating leverage to off-set impact of pricing pressures. Headwinds receding, although few uncertainties remain: With interest rate tightening cycle nearing end, we expect interest rate sensitive segments like passenger cars and M&HCVs to get some reprieve. This coupled with softening of commodity prices would result in stable cost of ownership. However, further increase in petrol prices and levy of an additional duty on diesel vehicle would negatively impact passenger vehicle demand in the short term. Also, competitive intensity is also set to remain high in all the segments. Valuation and view: Auto stock performance has been strong over the last six months with outperformance by all players, except Tata Motors and Maruti. With two key headwinds viz increase in interest rates and higher commodity prices expected to recede, we expect segments like car and CV to be biggest beneficiaries from these trends. We prefer players less vulnerable to competitive dynamics, enabling dilution of short-term headwinds - Hero MotoCorp, M&M and Tata Motors.

Key Financial Indicators

Volume Chg (%) ^ EBITDA Margins (%) FY13E 20.1 15.3 13.1 9.4 13.2 EPS (Rs) * FY11 90.4 100.5 48.2 82.4 27.1 FY12E 108.5 121.1 45.7 57.8 27.1 FY13E 124.0 150.5 60.9 83.3 31.2 EPS Growth (%) * FY11 43.9 -10.0 48.2 -9.2 503 FY12E 20.0 20.4 45.7 -29.9 0.2 FY13E 14.3 24.3 60.9 44.2 15.0 FY11 FY12E FY13E FY11 FY12E Bajaj Auto 34.1 18.1 16.1 20.4 19.9 Hero Honda 17.4 16.1 15.0 12.8 14.7 Mahindra & Mahindra 24.3 21.7 11.3 14.7 12.8 Maruti Suzuki 24.8 -10.0 15.0 9.7 7.8 Tata Motors * 25.2 2.0 13.7 14.4 13.2 ^ Volume grow th for standalone; * Consolidated w herever applicable

Comparative Valuation
CMP * (INR) Bajaj Auto 1,703 Hero MotoCorp 2,090 Mahindra & Mahindra 730 Maruti Suzuki 962 Tata Motors 183 * Price as on 1st December 2011
December 2011

Rating Buy Buy Buy Buy Buy

P/E (x) FY11 FY12E FY13E 18.8 15.7 13.7 20.8 17.3 13.9 15.0 15.8 11.9 11.8 16.8 11.6 6.8 6.7 5.9

EV/EBITDA (x) FY11 13.1 15.5 14.2 5.8 1.7 FY12E FY13E 10.7 8.6 10.7 8.1 13.2 11.5 8.3 5.7 1.5 1.1

RoE (%) FY11 FY12E FY13E 66.7 54.9 48.0 62.5 60.9 55.1 25.0 22.2 21.3 16.5 10.4 13.3 47.3 34.5 29.8

RoCE (%) FY11 FY12E FY13E 76.1 70.6 65.4 59.2 58.4 63.3 25.6 23.4 23.6 22.1 13.7 17.4 24.6 24.1 24.2 Source: Company/MOSL

Dashboard

Data Track

Hero MotoCorp
Above estimate at 536,772 units (+27% YoY, 5% MoM, v/s est 510,000); Buy

Snapshot of volumes for November

Nov-11 Total volume Nov-10 YoY (%) 27.4 Oct-11 512,238 MoM (%) 4.8 YTDFY12 YTDFY11 Chg (%) 19.6 FY12E YoY Residual (%) Gr. (%)

536,772 421,366

4,122,902 3,446,722

Highlights
Strong volume growth of 27% YoY

6,271,212 16.1 9.8 Source: Company/MOSL

Hero MotoCorp volumes grew by 27.4% YoY (5% MoM) to 536,772 units (v/s est 510,000). We estimate volume growth of 16.1% for FY12, implying residual growth of 9.8% and residual monthly run-rate of 537,078 units. Its scooter brand 'Pleasure' continues to grow strongly and contributes over 33,000 units/month. Commenting on its performance Mr Anil Dua, Sr VP (Marketing & Sales) said "Our sales continue to set new benchmarks in the industry. We have been maintaining five-lakhplus sales since August 2011, when we had launched our new brand identity. This 27 per cent growth in the post-festive month of November is significant as it comes after our record retail sales in the month of October." It is debottlenecking existing capacities by 0.7m units to 7m units by Mar-12, with large part of de-bottlenecking happening at Haridwar While it has not yet finalized on location . of 4th plant, it is confident to make it operational by 4QFY13. We model volume growth of 16.1% for FY12 to 6.27m units (due to capacity constraint), and 50bp contraction in EBITDA margins (adjusted for change in royalty accounting) to 11.3%. The stock trades at 17.3x FY12E EPS of INR121.1 and 13.9x FY13 EPS of INR150.5. Buy.

Hero MotoCorp: two-wheelers

FY10 625,000 560,000 495,000 430,000 365,000 300,000 Apr FY11 FY12

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Source: Company/MOSL

Hero MotoCorp: Financial & Valuation Summary

Bloomberg Equity Shares (m) HMCL IN 199.7
Year Net Sales PAT EPS EPS P/E (X) 20.8 17.3 13.9 P/CE (X) 17.9 12.1 10.2 P/BV (X) 14.1 10.5 7.6 EV/ EBITDA 15.5 10.7 8.1 RoE (%) 61.4 62.5 60.9 55.1 RoCE (%) 72.8 59.2 58.4 63.3 End (INR m) (INR m) CMP (INR) 2,090 3/10A 157,582 22,318 52-Week Range (INR) 2,232/1,378 3/11A 192,450 20,077 1,6,12 Rel. Perf. (%) -9/-19/27 3/12E 234,590 24,179 (INR) Gr. (%) 111.8 74.1 100.5 121.1 150.5 -10.0 20.4 24.3

M.Cap. (USD b)
December 2011

8.1

3/13E 276,233

30,049

Dashboard

Data Track

Bajaj Auto
Below estimates at 374,477 units v/s est 382,000 (+ 25% YoY, -5% MoM); Buy

Snapshot of volumes for November

Nov-11 Nov-10 YoY (%) 25.1 25.3 25.3 24.3 Oct-11 395,274 351,083 351,083 44,191 MoM (%) -5.3 -5.4 -5.4 -3.8 YTDFY12 YTDFY11 Chg (%) 16.4 15.9 15.9 20.9 FY12E YoY Residual (%) Gr. (%)

Total volume 374,477 299,231 Motorcycles 331,967 265,036 Total Two-Wheeler 331,967 265,036 Three-Wheelers 42,510 34,195

3,026,703 2,599,281 2,673,458 2,306,027 2,673,458 2,307,052 353,245 292,229

4,515,035 18.1 21.5 3,998,359 18.0 22.6 3,998,359 18.0 22.7 516,676 18.3 13.0 Source: Company/MOSL

Highlights
Strong growth in exports drive overall volume growth of 25% YoY

Bajaj Auto's total volumes grew 25% YoY (5.3% MoM de-growth) to 374,477 units (v/s est of 382,000 units), driven by strong growth in export volumes. Domestic volumes grew by 18% YoY to 245,221 units (v/s est of 257,000 units). Based on our volume growth estimates, implied residual growth is 21.5% and residual monthly run-rate of 372,083 units. Motorcycle volumes grew by 25% YoY (5% MoM de-growth) to 331,967 units (v/s est 340,000). We model FY12 2W volume growth of 18% to ~4m, implying residual runrate of 331,225 units (~23% residual growth). 3-wheeler volumes grew by 24% YoY (4% MoM de-growth) to 42,150 units (v/s est 42,000 units). We model 18.3% YoY growth to ~0.52m in FY12, implying residual runrate of 40,858 units (13% residual growth). Exports grew by 42% YoY (2% MoM de-growth) to 129,256 units (v/s est 125,000). The export momentum continued despite withdrawal of DEPB incentive from 1st October. The company maintained its volumes guidance of 4m motorcycles and 0.5m three wheelers for FY12. The management indicated 2HFY12 EBITDA margins to be better than 2QFY12 margins of 20.1%, driven by a) benefit of weak INR, b) full benefit of higher export incentives and export price increase and c) full benefit of domestic price increase. We estimate 2HFY12 EBITDA margins of 20.3% against 19.6% in 1HFY12. Our FY12 estimates factor in volume growth of 18.1% (18% for 2W & 18.3% for 3W) and 50bp decline in EBITDA margins to 19.9%. The stock trades at 15.7x FY12E EPS of INR108.5 and 13.7x FY13E EPS of INR124. Maintain Buy.

Bajaj Auto: Financial & Valuation Summary

Bloomberg Equity Shares (m) CMP (INR) 1,6,12 Rel.Perf.(%) M.Cap. (USD b) BJAUT IN 289.4 1,703 5/29/30 9.6

Year Net Sales

PAT

EPS

EPS

P/E (X) 18.8 15.7 13.7

P/CE (X) 18.0 15.1 13.2

P/BV (X) 10.0 7.6 5.9

EV/ EBITDA 13.1 10.7 8.6

RoE (%) 78.8 66.7 54.9 48.0

RoCE (%) 68.5 76.1 70.6 65.4

End (INR m) (INR m) (INR) Gr. (%) 3/10A 119,210 18,175 62.8 128.3 3/11A 3/12E 3/13E 166,089 201,723 238,196 26,152 31,390 35,885 90.4 108.5 124.0 43.9 20.0 14.3

52-Week Range (INR) 1,703/1,190

December 2011

Dashboard

Two-wheeler volumes (units)

FY10 440,000 375,000 310,000 245,000 180,000 115,000 50,000 Apr FY11 FY12

Discover and Pulsar contribute ~65% to two-wheeler volumes

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Three-wheeler volumes (units)

FY10 52,000 46,000 FY11 FY12

Volume momentum in three-wheeler continues

40,000 34,000 28,000 22,000 16,000 Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Export volumes (units)

FY10 180,000 160,000 FY11 FY12

Export volumes continues to be robust

140,000 120,000 100,000 80,000 60,000 40,000 Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Market mix
Domestic 100% 75% Exports

Market mix remains stable

50% 25% 0% Oct-08 Oct-09 Oct-10 Feb-09 Feb-10 Dec-08 Dec-09 Dec-10 Feb-11 Apr-08 Apr-09 Apr-10 Aug-08 Aug-09 Aug-10 Apr-11 Aug-11 Oct-11 Jun-08 Jun-09 Jun-10 Jun-11

Source: Company/MOSL December 2011

Dashboard

Data Track

Maruti Suzuki
Nov-11 volumes decline 18% at 91,772 units; Production normalizes after strike in Oct-11; Buy

Snapshot of volumes for November

Nov-11 Total volume Domestic A1 C A2 A3 A4 MUV Export Nov-10 YoY (%) -18.5 -17.2 -42.6 -34.5 -19.4 6.5 -9.5 -11.4 Oct-11 55,595 51,458 1,600 9,996 34,268 5,321 3 270 4,137 MoM (%) 65.1 61.0 -12.5 -3.8 74.2 122.4 -33.3 115.2 YTDFY12 681,200 607,417 15,059 97,973 417,304 72,449 336 4,296 73,783 YTDFY11 828,440 730,881 17,184 105,182 521,031 83,056 0 4,428 97,559 Chg (%) -17.8 -16.9 -12.4 -6.9 -19.9 -12.8 -3.0 -24.4 FY12E YoY Residual (%) Gr. (%) 4.6 2.5

91,772 112,554 82,870 100,063 1,400 2,440 9,612 14,686 59,680 74,063 11,836 11,115 162 0 180 199 8,902 10,051

1,143,905 -10.0 1,019,465 -10.0

124,439

-10.0

24.4

Highlights
The key A2 segment de-grew by 19% YoY (74% MoM growth)

Maruti's Nov-11 volumes de-grew by 18% YoY (+65% MoM) to 91,772 units (est 92,500 units). While domestic volumes de-grew by 17% YoY (+61% MoM), exports de-grew 11% YoY (+115% MoM). Based on our volume growth estimates, implied residual growth rate is 4.6% and residual monthly run-rate is 115,676 units. While this will be driven by expectations of a recovery in demand in 4QFY12, coupled with higher availability of diesel engines from 20,000/month to ~30,000/month, our FY12 volume estimate would see 2-3% downgrade as the company indicated that the demand environment remains challenging with no recovery in sight. Nov-11 volumes are reflection of normalization of production at Manesar, Gurgaon and SPIL plant, after strike in Oct-11 which had an impact of ~40,000 units. Domestic volumes de-grew 17% YoY (61% MoM growth) to 82,870 units (v/s est 80,000 units). While C segment de-grew by 35% YoY (4% MoM), the key A2 segment de-grew by 19% YoY (74% MoM growth) to 59,680 units. Swift volumes increased to 17,273 units (v/s 7,857 units in Oct-11). Our channel check suggests a waiting period of 8-9 months on Swift Diesel and 2-3 months on Swift Petrol. Export volumes at 8,902 units (v/s est 12,500) de-grew by 11% YoY (+115% MoM). Hyundai Eon recorded volume of 7,418 units in Nov-11. Eon sales have not picked up as anticipated owing to its higher price along with discounts of upto INR25,000 on Alto. The management indicated that margins would come under further pressure in 3QFY12, as full impact of weak INR and QoQ drop in volumes (due to strike in Oct-11 and maintenance in Dec-11) has its full impact. We model 10% de-growth in FY12 volumes to 1.14m and EBITDA margin decline of 200bp to 7.8%. Further weakness in currency and muted demand are key risk to our estimates. The stock trades at 16.7x FY12 consol. EPS of INR57.8 and at 11.6x FY13E EPS of INR83.3. Maintain Buy.
PAT Con. EPS EPS Con. P/E P/CE (x) 10.6 11.7 16.7 11.6 (x) 8.3 8.4 10.4 7.8 P/BV (X) 2.3 2.0 1.8 1.6 EV/ EBITDA 5.4 5.7 8.2 5.7 RoE (%) 21.1 16.5 10.4 13.3 RoCE (%) 28.4 22.1 13.7 17.4

Maruti Suzuki: Financial & Valuation Summary

Bloomberg Equity Shares (m) CMP (INR) 52-Wk Range (INR) 1,6,12 Rel.Perf.(%) M.Cap. (USD b)
December 2011

MSIL IN 289.0 962 1,600/1,010 -4/-7/-16 5.7

Year Total Inc.

End (INR m) (INR m) (INR) Gr. (%) 3/10A 296,231 25,068 90.8 113.8 3/11A 3/12E 3/13E 369,199 350,804 411,489 23,101 15,817 22,836 82.4 57.8 83.3 -9.2 -29.9 44.2

Dashboard

Monthly volumes (units)

130,000 FY10 FY11 FY12

Volumes reflect normalization of production at Maruti's plant

115,000 100,000 85,000 70,000 55,000 40,000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Export volumes (units)

20,000 16,000 12,000 8,000 4,000 0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY10 FY11 FY12

Export volumes also show recovery

Segment mix (domestic)

100% 75% A1 A2 A3 + A4 MPVs + UVs

A2 & A3 segments dominate the segment mix

50% 25% 0% Jun-08 Jun-09 Jun-10 Aug-08 Aug-09 Aug-10 Jun-11 Aug-11 Apr-08 Apr-09 Apr-10 Feb-09 Feb-10 Feb-11 Apr-11 Oct-08 Oct-09 Oct-10 Dec-08 Dec-09 Dec-10 Oct-11

Market mix
100% 75% Domestic Sales Exports

Export contribution to volumes expected to fall to ~11% in FY12 from 14.5% in FY10

50% 25% 0% Oct-08 Oct-09 Oct-10 Feb-09 Dec-08 Feb-10 Dec-09 Dec-10 Feb-11 Apr-08 Aug-08 Apr-09 Aug-09 Apr-10 Aug-10 Apr-11 Aug-11 Oct-11 Jun-08 Jun-09 Jun-10 Jun-11

Source: Company/MOSL December 2011

Dashboard

Data Track

Mahindra & Mahindra

In line with est at 58,249 units; UVs grew 56% while Tractor volumes are flat YoY

Snapshot of volumes for November

Nov-11 Total volume UV LCV Verito Three-Wheelers Tractors 58,249 32,611 1,095 1,127 5,889 17,527 Nov-10 44,659 20,646 676 876 4,468 17,993 YoY (%) 30.4 58.0 62.0 28.7 31.8 -2.6 Oct-11 73,344 32,193 1,163 1,818 6,332 31,838 MoM (%) -20.6 1.3 -5.8 -38.0 -7.0 -44.9 YTDFY12 472,590 240,200 8,457 11,652 45,370 166,911 YTDFY11 372,561 182,195 7,419 6,474 38,543 137,930 Chg (%) 26.8 31.8 14.0 80.0 17.7 21.0 FY12E YoY Residual (%) Gr. (%)

722,188 22.4 14.9 359,075 23.0 8.3 12,739 15.0 17.0 18,254 65.0 43.9 71,463 15.0 10.6 260,657 22.0 23.8 Source: Company/MOSL

Highlights
Strong growth in 4Wheelers pick-ups and UVs drive volumes

M&M's volumes came at 58,249 units (v/s est 57,100), a growth of 30% YoY (20% MoM de-growth), driven by strong growth in UVs and 4-wheeler pick-up. Our FY12 volume growth estimate of 22.4% implies residual growth rate of 14.9% and residual monthly run-rate of 62,399 units. UV volumes improved 56% YoY (flat MoM) to 32,138 units (v/s est 26,500), driven by strong growth in UVs pick-up trucks. While passenger vehicles grew by 45% YoY to 17,813 units, pick-up trucks volumes grew by 73% YoY to 13,362 units. Our FY12 estimates factor in 23% YoY growth in UV volumes, implying residual growth of 8.8% and residual monthly run-rate of 29,837 units. Bolero volumes were stable MoM at 8,004 units, while Scorpio volumes increased to 4,646 units (v/s 4,173 units in Oct-11). XUV500 recorded despatches of 1,637 units (v/s 1,213 units in Oct-11). Tractor volumes de-grew 2.6% YoY (45% MoM) to 17,527 units (v/s est 23,000). November and December are seasonally weak months for tractors. Our FY12 estimates factor in 22% YoY volume growth, implying residual growth of 23.8% (run rate of 23,436). 3-wheeler volumes grew 32% YoY (7% MoM de-growth) to 5,889 units (v/s est 5,250). Our FY12 estimates factor in 15% volume growth for 3Ws, implying residual monthly run-rate of 6,523 units. Ssangyong Motors (SYMC) reported 15.5% YoY growth (~2% MoM decline) in volumes to 8,971 units. Our CY11 estimates factor in volumes of 119,713 units, implying residual run-rate of 15,377 units for December, which is 6,000 higher than the current run rate. Our FY12 estimates factor in 22.4% volume growth (23% for UVs & 22% for tractors) and EBITDA margins of 12.8% (v/s 14.7% in FY11). Based on our estimates, the stock trades at 12x FY13E consolidated EPS of INR60.9. Maintain Buy.

Mahindra and Mahindra: Financial & Valuation Summary

Bloomberg Equity Shares (m) CMP (INR) 1,6,12 Rel.Perf.(%) M.Cap. (USD b)
December 2011

MM IN 587.2 730 -2/22/17 8.5

Year Net Sales S/A PAT S/A EPS End (INR m) (INR m) 3/10A 185,888 20,451 3/11A 234,944 3/12E 298,620 3/13E 340,685 25,732 27,301 31,039

Cons. Con. EPS P/E Cons.

RoE

RoCE

EV/

EV/

(INR) E P S ( IN R ) Gr (%) (x) P/E (x) (%) 34.3 40.8 61.9 21.3 17.9 26.1 43.1 45.7 52.0 48.2 45.7 60.9 18.1 -5.1 33.1 16.9 16.0 14.0 15.1 16.0 12.0 25.0 22.2 21.3

(%) Sales (x) EBITDA 25.4 2.3 14.0 25.6 23.4 23.6 1.9 1.5 1.3 12.4 11.2 9.6

52-Week Range (INR) 875/584

Dashboard

Utility vehicle volumes (units)

FY10 39,000 34,000 FY11 FY12

UV volumes continue to remain strong

29,000 24,000 19,000 14,000 9,000 4,000 Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Tractor volume (units)

FY10 36,000 32,000 28,000 FY11 FY12

Tractor volumes normalize after robust growth in Oct-11

24,000 20,000 16,000 12,000 8,000 4,000 Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Source: Company/MOSL

Product mix
UVs 100% Tractors LCVs, 3-w heelers

75%

Tractors and UVs dominate the segment mix, but we expect the share of three wheelers and LCVs to increase
0% Oct-08 Oct-09 Oct-10 Feb-09 Feb-10 Feb-11 Dec-08 Dec-09 Dec-10 Apr-08 Apr-09 Apr-10 Aug-08 Aug-09 Aug-10 Apr-11 Aug-11 Oct-11 Jun-08 Jun-09 Jun-10 Jun-11 25% 50%

Source: Company/MOSL

December 2011

Dashboard

Data Track

Tata Motors
Above est at 76,823 units (+41% YoY, +13% MoM; v/s est 61,750) driven by strong growth in LCV and PVs

Snapshot of volumes for November

Nov-11 Total volume HCV's LCV's Cars UV's of which exports 76,823 16,999 31,740 23,862 4,222 4,349 Nov-10 54,622 15,873 23,016 12,558 3,175 4,203 YoY (%) 40.6 7.1 37.9 90.0 33.0 3.5 Oct-11 68,009 17,890 24,294 21,617 4,208 4,171 MoM (%) 13.0 -5.0 30.6 10.4 0.3 4.3 YTDFY12 544,304 138,338 223,027 151,879 31,060 39,410 YTDFY11 499,493 128,101 176,360 168,902 26,130 36,849 Chg (%) 9.0 8.0 26.5 -10.1 18.9 6.9 FY12E 831,120 229,550 340,215 215,043 46,312 YoY Residual (%) Gr. (%) 1.9 7.2 15.3 -18.4 7.5 -9.2 6.1 -1.2 -33.2 -9.9

Source: Company/MOSL

Highlights
Volumes grew by 41% YoY driven by LCV and Passenger Cars

Total volumes grew by 41% YoY (13% MoM) to 76,823 units (v/s est 61,750 units), driven by LCV volume growth of 38% YoY (31% MoM) and Passengers cars growth of 90% YoY (10% MoM). CV volumes grew by 25% YoY (15.5% MoM) to 48,739 units (v/s est 43,750 units). M&HCV's volumes grew 7% YoY to 16,999 units (v/s est 17,750 units), whereas LCV volumes grew by 38% YoY to 31,740 units (v/s est 26,000 units). Our FY12 estimates factor in volume growth of 11.9% for CVs (incl exports), with 7.2% growth in M&HCV and 15.3% growth in LCVs. Car volumes were grew by 90% YoY (10% MoM) to 23,862 units (v/s est 14,500 units). Excluding Nano, domestic car volumes grew by 46% YoY (flat MoM). Nano volumes improved to 6,401 units (v/s 3,868 units in Oct-11). Our FY12 estimates factor in volume de-growth of 18.4% for passenger cars (incl exports). Indica and Indigo (including Manza) volumes remained firm at 10,926 and 6,213 units. UV volumes grew by 33% YoY (flat MoM) to 4,222 units (est 3,500 units). Our FY12 estimates factors in for volume growth of 1.9% (7.2% for M&HCVs & 15.3% for LCVs) and 200bp contraction in EBITDA margins to 7.9% in standalone operations. We would wait for sustenance of the improving trend in LCV and PV volumes before upgrading our FY12 volume estimates. JLR volumes are estimated at 286,000 (+17.3%) and EBITDA margins of 15.2% (-120bp). The stock trades at 5.9x FY13E consolidated EPS of INR31.2 and 9.6x FY13E normalized consolidated EPS (adj for R&D capitalization) of INR19. The DVR share trades at 3.1x FY13 consol EPS and 5.1x FY13 consol normalized EPS. Maintain Buy.

Tata Motors: Financial & Valuation Summary

Bloomberg Actual Eq. Shares (m) CMP (Rs) 52-Week Range 1,6,12 Rel. Perf. (%) M.Cap. (US$ b) TTMT IN 3,210.1 183 276/138 2/-17/-11 11.9
Year Sales Adj. PAT Adj. EPS (Rs m) 15,051 90,695 90,878 (Rs) 4.5 27.1 27.1 31.2 Norm. P/E Norm. RoE RoCE EV/ EV/ End * (Rs m) 3/10A 925,193 3/11A 1,231,333 3/12E 1,495,131 EPS (Rs) ^ Ratio P/E (x) (%) (%) Sales (x) EBITDA (x) -4.2 40.7 -43.1 18.3 10.7 0.4 4.0 17.3 14.8 19.0 6.8 6.7 5.9 10.6 12.4 9.6 47.3 24.6 34.5 24.1 29.8 24.2 0.3 0.2 0.1 1.7 1.5 1.1

3/13E 1,690,412 104,512

* Consolidated; ^ Normalized for capitalized expenses

December 2011

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M&HCV volumes (units)

FY10 28,000 24,000 20,000 16,000 12,000 8,000 4,000 Apr FY11 FY12

M&HCV demand shows sign of improvement

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

LCV volumes (units)

FY10 36,000 32,000 FY11 FY12

LCV volumes back at higher levels post strike at Pantnagar in Oct-11

28,000 24,000 20,000 16,000 12,000 8,000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Car volumes (units)

FY10 32,000 28,000 FY11 FY12

Domestic car volume improves

24,000 20,000 16,000 12,000 8,000 Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Product mix in the CV segment

100% 75% M&HCVs LCVs

LCVs account for ~58% of the CV product portfolio

50% 25% 0% Oct-08 Oct-09 Oct-10 Feb-09 Feb-10 Dec-08 Dec-09 Dec-10 Feb-11 Apr-08 Apr-09 Apr-10 Aug-08 Aug-09 Aug-10 Apr-11 Aug-11 Oct-11 Jun-08 Jun-09 Jun-10 Jun-11

Source: Company/MOSL December 2011

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Data Track

TVS Motor
Volume growth 11.8% YoY driven by growth in mopeds and scooters
Snapshot of volumes for November
Nov-11 Nov-10 Total volume Motorcycles Scooters Mopeds 175,535 157,041 62,608 62,995 44,301 36,233 65,920 54,654 YoY (%) 11.8 -0.6 22.3 20.6 Oct-11 183,718 75,652 47,445 56,909 MoM (%) -4.5 -17.2 -6.6 15.8 YTDFY12 YTDFY11 Chg (%)

1,503,172 1,341,106 12.1 592,055 556,592 6.4 366,734 300,734 21.9 514,860 459,417 12.1 Source: Company/MOSL

Motorcyle volumes (units)

FY10 95,000 80,000 FY11 FY12

Motorcycle volumes remained flat YoY

65,000 50,000 35,000 20,000 Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Scooters and mopeds (units)

FY10 136,000 124,000 112,000 100,000 FY11 FY12

Scooters and mopeds volumes continue to be robust

88,000 76,000 64,000 52,000 40,000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Sales mix
Motorcycles 100% 75% 50% 25% 0% Oct-08 Oct-09 Oct-10 Feb-09 Feb-10 Dec-08 Dec-09 Dec-10 Feb-11 Apr-08 Apr-09 Apr-10 Aug-08 Aug-09 Aug-10 Apr-11 Aug-11 Oct-11 Jun-08 Jun-09 Jun-10 Jun-11 Scooters & Mopeds

Scooters and mopeds have been a key volume driver

Source: Company/MOSL December 2011

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Indica and Indigo (incl Manza) volumes remain firm at 10,926 and 6,213 units respectively

Swift volumes increased to 17,273 units while Alto and WagonR volumes normalize

Bolero and Scorpio volumes remain firm

Eon volumes have not picked up as anticipated, while i20 and Verna recorded robust volumes

Honda volumes were impacted by floods at Thailand Figo volumes increased to 6,106 units

December 2011

13

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Special Report

Tata Motors (JLR): On the right track

Niche presence, new launches, wider market reach to be key drivers

Under Tata Motors parentage, JLR is all set to emerge as a bigger, better and stronger global luxury vehicle player. It is taking several initiatives to fortify its strength in luxury SUVs and improve its weak positioning in luxury car market. Outlook for luxury vehicles remains positive, JLR can drive secular growth. Land Rover commands strength; Evoque to drive growth, market share gains. Jaguar's niche presence offers significant headroom to grow. China a big opportunity; JLR's local presence will boost competitiveness. Improved volumes, market mix, cost efficiencies to offset cost push. TTMT's domestic CV business has seen reduced volatility driven by higher LCV contribution. Outlook for luxury vehicles positive, JLR can drive secular growth The luxury vehicle market will post CAGR of 8.9% to 9m units over 2011-15. We expect China and BRIKT (Brazil, Russia, India, Korea and Turkey) to be key growth drivers with CAGR of 11.4% and 8.6% respectively. Jaguar Land Rover's (JLR) luxury vehicle market share (~4% or 0.23m units), comprising 1.3% in luxury cars and 9.9% in luxury SUVs, is small compared with the top three players. JLR's weakness in cars offers headroom for growth, driven by planned launches over 2-3 years. JLR's entry in the lower luxury segment will give it access to higher volume segments, where it has no presence. Land Rover commands strength; Evoque to drive growth, market share In the global premium SUV segment, Land Rover's volumes are comparable with those of BMW (excluding X1), Mercedes Benz and Audi. Within Land Rover brand, Range Rover portfolio enjoys a relatively more premium image. The luxury SUV segment registered 11.6% CAGR over CY00-10 and we expect it to post 9.7% CAGR over CY10-15. JLR's launch of Evoque in the high volume potential compact luxury SUV segment will be a key growth driver over 2-3 years. Jaguar's niche offers significant headroom for growth Land Rover competes well with the top three luxury SUV makers, but Jaguar's volumes lag its peers. It has just three models and seems to be weak, with volumes of only ~54,000 units (1.3% market share). Jaguar's small product range and absence in the high volume, entry-level luxury segment are major reasons for its comparatively smaller size. We foresee strong potential for Jaguar in the entry-level luxury segment (D2), a market of over 1.1m units a year. Jaguar can leverage its brand heritage to gain market share in the luxury car segment. JLR's European peers sell ~1m cars in the segment in which Jaguar is present and ~1.2m units in the compact luxury car segment, which Jaguar plans to enter by CY14. Evoque key to growth, can add volumes of 70,000-80,000 a year Evoque is positioned as the smallest, lightest and most fuel efficient Range Rover. Range Rover intends to leverage its brand heritage to enter a lower priced, high volume potential luxury compact SUV segment. Evoque has garnered high interest with ~20,000 order backlog (after ~15,000 dispatches) and the management expects volumes of 70,000-80,000 a year.
December 2011

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The compact SUV segment is expected to post CAGR of ~36% over 2010-15 to 0.7m units. Evoque enjoys distinct brand positioning and is not expected to cannibalize the existing product. Some deterioration in Land Rover's product mix is expected, the impact of which would be offset by higher volumes. China a big opportunity for JLR; Local presence to improve competitiveness In 10 years' time, China is expected to account for 22% (2.1m units) of global premium vehicle volumes from 13% currently. China's luxury vehicle market will post 11.4% CAGR over next 10 years. Premium pricing compared with other markets and a better product mix will result in higher realizations and make China one of the most profitable luxury vehicle markets. With its strong growth potential, luxury carmakers are increasing their presence in China. Since JLR is a small player in China (4% market share) the market offers potential to ramp-up volumes. JLR will increase its China presence by almost doubling its dealer network to 100 by CY11 and set up a manufacturing presence (through a JV as mandated by Chinese law) to circumvent high import duty. Improving volumes, market mix, cost efficiencies to offset cost push We estimate JLR's overall volumes will grow 17% YoY to ~286,000 units in FY12 and realizations will improve by 7% in FY12 due to an improved market mix. It will expand regional coverage in emerging economies with growing sales potential, especially in China, its most profitable market. We expect short-term EBITDA margins to contract due to high raw material and marketing costs. However, the benefits of higher operating leverage, cost efficiency and a better market mix will kick-in in the medium term. We expect JLR to generate free cash flow of GBP364m and GBP582m in FY12 and FY13, respectively, despite annual capex of GBP1.5b.
Also refer our Detailed Report dated 25 November 2011

Domestic business a key contributor with high visibility JLR is the largest contributor to Tata Motors' (TTMT) consolidated performance, contributing ~23% to normalized EBITDA and 46% to fair value estimates. TTMT's domestic business, in which CVs are key contributor, offers better visibility. The increasing contribution of LCVs to CV volumes (~60% currently v/s ~49% in FY08) reduces the cyclicality of the CV business. We expect TTMT's passenger vehicle (PV) business to underperform the domestic PV industry and lose market share. Valuation and view TTMT's stock corrected ~26% over the past six months and underperformed the Sensex by 13%. As a result, valuations at 11.5x FY12 and 9x FY13 normalized EPS for ordinary share, and 6.3x FY12 and 4.9x FY13 normalized EPS for DVR shares is very attractive. Buy with target price of INR235 (SOTP) for the ordinary share.
Tata Motors: Financial & Valuation Summary

Bloomberg Actual Eq. Shares (m) CMP (Rs) 52-Week Range 1,6,12 Rel. Perf. (%) M.Cap. (US$ b)

TTMT IN 3,210.1 183 276/138 2/-17/-11 11.9

Year

Sales

Adj. PAT Adj. EPS (Rs m) 15,051 90,695 90,878 (Rs) 4.5 27.1 27.1 31.2

Norm.

P/E

Norm. RoE RoCE

EV/

EV/

End * (Rs m) 3/10A 925,193 3/11A 1,231,333 3/12E 1,495,131

EPS (Rs) ^ Ratio P/E (x) (%) (%) Sales (x) EBITDA (x) -4.2 40.7 -43.1 18.3 10.7 0.4 4.0 17.3 14.8 19.0 6.8 6.7 5.9 10.6 12.4 9.6 47.3 24.6 34.5 24.1 29.8 24.2 0.3 0.2 0.1 1.7 1.5 1.1

3/13E 1,690,412 104,512

* Consolidated; ^ Normalized for capitalized expenses

December 2011

15

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Sector Gauge

Two-wheelers
Volume growth continues

Two-wheelers: Volume snapshot

Total Domestic 2W % of Total 2W Total Motorcycle % of Domestic 2W <125cc % of Motorcycle >125cc % of Motorcycle Scooters & Mopeds % of Domestic 2W Exports % of Total 2W Total 2W Oct-11 Oct-10 1,147,621 1,125,052 88 89 879,883 874,146 77 78 606,513 631,288 69 72 273,370 242,858 31 28 267,738 250,906 23 22 158,302 136,735 12 11 1,305,923 1,261,787 YoY (%) Sep-11 MoM (%) 2.0 1,233,283 -6.9 88 0.7 933,465 -5.7 76 -3.9 651,841 -7.0 70 12.6 281,624 -2.9 30 6.7 299,818 -10.7 24 15.8 175,217 -9.7 12 3.5 1,408,500 -7.3 YTD FY12 Chg (%) FY11 Chg (%) 7,736,832 15.3 11,746,519 25.3 87 88 5,902,541 13.7 9,018,276 22.8 76 77 4,209,989 11.4 6,512,197 18.9 71 72 1,692,552 19.9 2,506,079 34.6 29 28 1,834,291 20.6 2,728,243 34.4 24 23 1,183,860 29.9 1,533,225 34.5 13 12 8,920,692 17.0 13,279,744 26.3 Source: SIAM/MOSL

Two-wheelers: Domestic volume trend (units)

FY10 1,300,000 FY11 FY12

Domestic two-wheeler volume momentum continues to remain strong

1,150,000 1,000,000 850,000 700,000 550,000 400,000 May Aug Nov Mar Jun Sep Jan Feb Jul Dec Apr Oct

Motorcycle: Domestic market share in <125cc segment (Domestic)

Bajaj Auto 100% Hero Honda TVS Motor Yamaha

Hero MotoCrop continues to dominate <125cc segment, despite increase in competition

75%

50%

25%

0% Jun-08 Jun-09 Jun-10 Aug-08 Aug-09 Aug-10 Jun-11 Aug-11 Apr-08 Apr-09 Apr-10 Apr-11 Oct-08 Oct-09 Oct-10 Feb-09 Feb-10 Feb-11 Dec-08 Dec-09 Dec-10 Oct-11

December 2011

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Motorcycles: domestic market share in the >125cc segment

Bajaj Auto 100% 75% Hero Honda TVS Motor Yamaha HMSI Suzuki

Encouraging response to the Discover150cc helped Bajaj Auto to improve market share in the >125cc
50% 25% 0% Jun-08 Jun-09 Jun-10 Aug-08 Aug-09 Aug-10 Jun-11 Aug-11
Aug-11

Apr-08

Apr-09

Apr-10

Apr-11

Oct-08

Oct-09

Oct-10

Feb-09

Feb-10

Motorcycles: segment mix

100% 75% 50% 25% 0% Jun-08 Jun-09 Jun-10 Aug-08 Aug-09 Aug-10 Jun-11 Apr-08 Apr-09 Apr-10 Apr-11 Oct-08 Oct-09 Oct-10 Feb-09 Feb-10 Feb-11 Dec-08 Dec-09 Dec-10 Oct-11 < 125CC > 125CC

<125cc forms ~70% of the motorcycle segment

Two-wheelers: domestic market share

Hero Honda 100% 75% Bajaj Auto HMSI Yamaha Suzuki

Market share remains stable

50% 25% 0% Jun-08 Jun-09 Jun-10 Aug-08 Aug-09 Aug-10 Jun-11 Aug-11
Feb

Apr-08

Apr-09

Apr-10

Feb-11

Dec-08

Dec-09

Dec-10

Apr-11

Oct-08

Oct-09

Oct-10

Feb-09

Feb-10

Two-wheelers: export volumes (units)

FY10 200,000 180,000 FY11 FY12

Export volume remains firm

160,000 140,000 120,000 100,000 80,000 60,000 May Aug Nov Mar Jun Sep Dec Jan Apr Jul Oct

Feb-11

Dec-08

Dec-09

Dec-10

Oct-11

December 2011

Oct-11

17

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Sector Gauge

Three-wheelers
Volumes driven by strong growth in export markets

Three-wheelers: Volume snapshot

Total Domestic 3W % of Total 3W Passenger % of Domestic eW Total Goods % of Domestic 3W <1T % of Goods Vehicle >1T % of Goods Vehicle Exports % of Total 3W Total 3W Oct-11 49,031 62 39,087 80 9,944 20 7,942 80 2,002 20 29,633 38 78,664 Oct-10 50,064 68 41,209 82 8,855 18 7,398 84 1,457 16 24,087 32 74,151 YoY (%) -2.1 -5.1 12.3 7.4 37.4 23.0 6.1 Sep-11 MoM (%) 49,255 -0.5 61 39,940 -2.1 81 9,315 6.8 19 7,012 13.3 75 2,303 -13.1 25 31,581 -6.2 39 80,836 -2.7 YTD FY12 Chg (%) 298,526 -0.2 57 235,528 -3.9 79 62,998 16.8 21 51,028 20.8 81 11,970 2.4 19 228,035 45.5 43 526,561 15.5

Mar-11 FY11 Chg (%) 526,030 19.5 66 426,133 21.9 81 99,897 10.2 19 79,467 9.0 80 20,430 15.2 20 269,968 55.8 34 795,998 29.7 Source: SIAM/MOSL

Three-wheelers: volume trend (including exports)

FY10 92,000 80,000 FY11 FY12

Strong growth in export markets, but domestic volumes muted

68,000 56,000 44,000 32,000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Three-wheelers: domestic segment mix

Passenger Goods

100%

75%

Passenger segment dominates three-wheelers with 80% contribution

25% 50%

0% Jun-08 Jun-09 Jun-10 Aug-08 Aug-09 Aug-10 Jun-11 Aug-11 Apr-08 Apr-09 Apr-10 Apr-11 Oct-08 Oct-09 Oct-10 Feb-09 Feb-10 Feb-11 Dec-08 Dec-09 Dec-10 Oct-11

December 2011

18

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Three wheelers: passenger segment market share

Bajaj Aut o Piaggio M&M TVS Ot her s

100%

Bajaj Auto continues to dominate passenger segment

75%

50%

25%

0% Jun-08 Jun-09 Jun-10 Aug-08 Aug-09 Aug-10 Jun-11 Aug-11

Aug-11

Apr-08

Apr-09

Apr-10

Apr-11

Oct-08

Oct-09

Oct-10

Feb-09

Feb-10

Three wheelers: goods segment market share

Bajaj Aut o Piaggio M&M Ot hers

100% 75% 50% 25% 0% Jun-08 Jun-09 Jun-10 Aug-08 Aug-09 Aug-10 Jun-11 Apr-08 Apr-09 Apr-10 Apr-11 Oct-08 Oct-09 Oct-10 Feb-09 Feb-10 Feb-11 Dec-08 Dec-09 Dec-10 Oct-11

... Piaggio continues to lead in the goods segment

Feb-11

Dec-08

Dec-09

Dec-10

Oct-11

December 2011

19

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Sector Gauge

Cars and UVs

Initial impact of macro-headwinds on demand visible

Passenger vehicles: Volume snapshot

Total Domestic PVs % of Total PVs Total Cars % of Domestic PVs A1 & A2 % of Cars A3 % of Cars A4 & above % of Cars UVs % of Domestic PVs MPVs % of Domestic PVs Exports % of Total PVs Total PVs Oct-11 183,142 85 138,521 76 99,786 72 29,021 21 9,714 7 28,497 16 16,124 9 33,524 15 216,666 Oct-10 YoY (%) 229,647 -20.3 88 181,704 -23.8 79 143,646 -30.5 79 33,048 -12.2 18 5,010 93.9 3 28,382 0.4 12 19,561 -17.6 9 30,715 9.1 12 260,362 -16.8 Sep-11 MoM (%) YTD FY12 Chg (%) FY11 Chg (%) 218,170 -16.1 1,379,681 -1.8 2,508,365 28.5 85 82 85 165,925 -16.5 1,047,721 -5.1 1,972,943 29.1 76 76 79 119,927 -16.8 771,258 -10.8 1,538,331 29.0 72 74 78 34,681 -16.3 212,031 6.0 358,079 29.6 21 20 18 11,317 -14.2 64,432 65.2 76,533 28.3 7 6 4 32,516 -12.4 196,794 8.4 322,035 18.1 15 14 13 19,729 -18.3 135,166 13.2 213,387 42.0 9 10 9 39,646 -15.4 293,558 19.5 444,438 -0.4 15 18 15 257,816 -16.0 1,673,239 1.4 2,952,803 23.2 Source: SIAM/MOSL

Cars: domestic volume (units)

FY10 200,000 FY11 FY12

Oct-11 volumes impacted due to demand slow down and strike at Maruti's plant

160,000

120,000

80,000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

UVs & MPVs: domestic volume (units)

64,000 FY10 FY11 FY12

Volumes remain stable

52,000 40,000 28,000 16,000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

December 2011

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Passenger vehicles: export volume (units)

FY10 55,000 50,000 45,000 FY11 FY12

Export volume declines

40,000 35,000 30,000 25,000 20,000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Cars: domestic market share

100% 75% 50% 25% 0% Jun-08 Jun-09 Jun-10 Aug-08 Aug-09 Aug-10 Jun-11 Aug-11
Aug-11

Maruti

TataMotor

Hyundai

GM

Honda

Maruti's market share impacted due to strike

Apr-08

Apr-09

Apr-10

Apr-11

Oct-08

Oct-09

Oct-10

Feb-09

Feb-10

UVs: domestic market share

M&M 100% TataMotor Toyota Maruti GM

M&M is the market leader in the UV segment

75% 50% 25% 0% Jun-08 Jun-09 Jun-10 Aug-08 Aug-09 Aug-10 Jun-11 Apr-08 Apr-09 Apr-10 Apr-11 Oct-08 Oct-09 Oct-10 Feb-09 Feb-10 Feb-11 Dec-08 Dec-09 Dec-10 Oct-11

Passenger vehicles: segment mix

100% 75% A1 A2 A3 A4 & above MPV UV

A2 dominates the passenger vehicles segment

50% 25% 0% Jun-08 Jun-09 Jun-10 Aug-08 Aug-09 Aug-10 Jun-11 Aug-11 Apr-08 Apr-09 Apr-10 Feb-09 Feb-10 Feb-11 Apr-11 Oct-08 Oct-09 Oct-10 Dec-08 Dec-09 Dec-10 Oct-11

Feb-11

Dec-08

Dec-09

Dec-10

Oct-11

December 2011

21

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Sector Gauge

Commercial vehicles
LCV growth remains strong

Commercial vehicles: Volume snapshot

Total Domestic CVs Oct-11 61,800 Oct-10 51,958 YoY (%) 18.9 23.9 32.1 -19.2 15.3 16.7 5.2 -20.9 14.0 Sep-11 70,634 MoM (%) -12.5 -12.8 -11.4 -23.4 -12.2 -12.7 -8.6 -39.2 -15.7 YTD FY12 Chg (%) 432,448 18.0

Mar-11 FY11 Chg (%) 679,049 27.7

% of Total CVs
Total M&HCV

91
27,024

88
21,807

88
31,004

90
187,491 8.2 11.9 -10.3 26.8 29.7 8.8 25.2 18.7

90
322,928 31.8 36.3 10.9 24.1 24.8 19.7 67.3

% of Domestic CVs
Goods

44
24,208

42
18,321

44
27,326

43
162,025

48
275,211

% of M&HCVs
Passenger

90
2,816

84
3,486

88
3,678

86
25,466

85
47,717

% of M&HCVs
Total LCVs

10
34,776

16
30,151

12
39,630

14
244,957

15
356,121

% of Domestic CVs
Goods

56
31,080

58
26,637

56
35,585

0
215,783

0
314,932

% of LCVs
Passenger

50
3,696

51
3,514

50
4,045

50
29,174

46
41,189

% of LCVs
Exports

6
5,793

7
7,323

6
9,527

7
49,199

6
75,311

% of Total CVs
Total CVs

9
67,593

12
59,281

12
80,161

10
481,647

10
754,360 30.8 Source: SIAM/MOSL

M&HCVs: Domestic volume, goods vehicles (units)

FY10 40,000 32,000 24,000 16,000 8,000 0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY11 FY12

M&HCVs: domestic volume, buses (units)

6,000 4,500 FY10 FY11 FY12

M&HCV volumes remains muted

3,000 1,500 0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

December 2011

22

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M&HCVs: domestic market share, goods (%)

TataMotor 100% 75% AshokLeyland Eicher

Tata Motors continue to dominate M&HCV goods segment

50% 25% 0% Jun-08 Jun-09 Jun-10 Aug-08 Aug-09 Aug-10 Jun-11 Aug-11
Aug-11

Apr-08

Apr-09

Apr-10

Apr-11

Oct-08

Oct-09

Oct-10

Feb-09

Feb-10

M&HCVs: domestic market share, buses (%)

100% 75% 50% 25% 0% Jun-08 Jun-09 Jun-10 Aug-08 Aug-09 Aug-10 Jun-11 Oct-08 Oct-09 Oct-10 Feb-09 Feb-10 Feb-11 Dec-08 Dec-09 Dec-10 Oct-11
Mar

TataMotor

AshokLeyland

Eicher

Sw araj

Apr-08

Apr-09

Apr-10

Feb-11

Dec-08

Dec-09

Dec-10

LCVs: domestic volumes (units)

FY10 50,000 40,000 FY11 FY12

LCVs continue robust growth

30,000 20,000 10,000 0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb

Apr-11

Oct-11

December 2011

23

December 2011

Tata Motors dominates the

domestic LCV segment

Recovery in M&HCVs drives

100% 25% 50% 75% 0%

increase in contribution

to CVs

100%

25%
Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09

50%

75%

0% Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 LCVs Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 <16T Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 <12T <35T
Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11

LCVs: domestic market share (%)

TataMotor

Goods: segment-wise break-up (%)

Piaggio M&M Others

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News and Events

Major developments in the auto sector

November 2011

Tata Motors launched an all new Nano with improved mileage and power
Tata Motors has given Nano a facelift, with a more powerful engine and new features, while keeping the prices same. Tata Motors announced "Making the Tata Nano even more desirable, the car's 624cc engine has been made more powerful, delivering an impressive 38 PS of power (earlier 35 PS) and 51 Nm of torque (earlier 48 Nm)." Despite delivering more power, the car will become more fuel efficient. Nano will now give a mileage of 25.4 km per litre of petrol compared to 23.6 km a litre earlier. Despite adding all these features, the company has not raised the prices of the car. The entry-level variant of the Nano will now have features like booster-assisted brakes, which were available only in the mid and topend variants.

Honda Motorcycles launched a new variant of Unicorn Dazzler at INR66,198

Unicorn Dazzler

Honda Motorcycle & Scooter India (HMSI) has launched a new variant of its 150 cc bike CB Unicorn Dazzler, priced up to INR66,198 (ex-showroom, Delhi). The new Deluxe variant of CB Unicorn Dazzler will be available by the end of November, 2011. Technical specifications of both standard and deluxe variants will remain the same. The deluxe variant is priced at INR66,198 and the standard variant is priced at INR65,198 (ex-showroom, Delhi). Driven by a 150cc engine, the CB Unicorn Dazzler has a power of 14 BHP and comes with tubeless tyres and alloy wheels.

Skoda launches the Yeti

Skoda launches the Yeti 4x2 at INR13.2 Lakhs

Skoda Auto launched the 4x2 version of new koda Yeti. The range of Yeti is extended with a two-wheel-drive diesel option priced at INR 13.20 lakhs (ex showroom Maharashtra) and is expected to further drive the car's success into new customer groups. The SUV is available in two variants - Active and Ambition. The product specifications are 2.0 litre diesel engine with maximum power of 81kW(110PS) @4200rpm and maximum torque of 250Nm@15002500rpm.

Hyundai puts INR4b diesel plant on hold due to sluggish demand

Hyundai Motor India (HMIL) has put its INR4b diesel engine plant on hold due to sluggish demand. The plant is expected to have an installed capacity of 1.5 lakh unit per annum. HMIL spokesperson said "Given the fact that the market is not buoyant at the moment, our diesel engine plant plans are on hold at the moment. The company will hold its plans for a medium term". It was reported that the plant would have manufactured three different engines of 1.1 litre, 1.4 litre and 1.6 litre capacities only for the domestic market. The company had planned to utilise the engine from the new plant in its new models and only a few would be used for replacing the existing models. The company at presents imports its diesel engines from Korea for its models such as i20 and Verna.

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Dashboard

Suzuki Motorcycles launches the luxury cruiser Intruder M800 at INR8.88 lakh
Unicorn Dazzler

Suzuki Motorcycle India launched its cruiser bike Intruder M800 priced at INR8.88 lakh (exshowroom Delhi). Suzuki currently sells other superbike models, such as the 1350 cc Hayabusa at INR13 lakh, Intruder M 1800 cc priced at INR13.25 lakh, GSX-R1000 at INR13.75 lakh and Bandit 1200S at INR8.8 lakh in India. The new bike that would compete with few models of American bike company Harley Davidson will be powered by a 805 cc fuelinjected liquid-cooled, 8-valve V-Twin engine and has been launched in 12 cities, including Delhi, Bangalore, Hyderabad, Chennai, Mumbai, Pune and Ahmedabad.

Petrol price cut by INR0.78 per litre; second reduction in two weeks
With global crude rates coming down, petrol prices were cut by INR0.78 per litre from 1st December, the second reduction in two weeks. Petrol price in Delhi will now cost INR65.64 per litre as against INR66.42 a litre earlier. Petrol in Mumbai will cost INR70.65 a litre, down by INR0.82 per litre. The reduction came on back of a 3.2% or INR2.22 per litre cut in rates effected from November 16. This was the first cut in retail prices in nearly three years and the first since prices were decontrolled in June 2010. Before that, oil companies on November 4 raised petrol price by INR1.80 a litre as fall in rupee's value against the dollar increased the cost of oil imports.

JLR to raise workforce at UK plant by 25%

Jaguar Land Rover is creating 1,000 new jobs at its Solihull manufacturing plant in the UK, raising the workforce at the site by 25%. The company said it would be recruiting production operators and skilled trades people immediately. The company hasn't specified what products they'll be working on, except to say that it will be part of the company's target of 40 new product actions in the next four years. JLR has increased its work force in the UK significantly over the past year: its plans to build a new engine production plant near Wolverhampton will create 750 jobs, while earlier in the year it recruited 1,500 people to its Halewood plant to work on the Evoque, alongside bringing in 336 graduates and a further 1,000 engineers over the next two years.

Toyota and Honda looking to source components from alternate sources

The Japanese car majors Toyota Kirloskar and Honda Siel are reportedly looking for alternative component sources as flood crisis in Thailand, a key component supplier in Asia, has hit supplies and disrupted production at their facilities in India. Toyota imports some of the key engine components for Fortuner and Innova from Thailand, while Honda Siel imports underbody parts and electronic parts. It was reported that Toyota is diverting spare parts meant for plants in Indonesia and the Philippines to keep up production for the waiting Innova and Fortuner customers in India. While Honda Siel is in negotiation with alternative sources from China and Japan to bring back normalcy in production.

December 2011

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